Trying to do this mentored down to 40 for clearing out the quest and getting AA off of Lord Chesgard in this SH instance, I ran around closing coffins for 30 minutes without a spawn. After starting from the zone-in end and clearing grey zombies to the other end the first time, I got the expect respawn of zombies and started to clear again. After killing all nothing happened. I tried again zoning out and back in. I cleared the first set, closing lids, and then no second spawn happened. I ran around for another half hour closing lids, with a few times all lids being closed for 10-20 seconds as I stood there waiting. They just started opening up again. After another 20 minutes I gave up and submitted a bug report.
Worked fine for me a couple of weeks ago (not that it couldn't have got bugged since). I started the event, closed all the coffins, killed the spawns and then clicked all the coffins again, and that spawned Lord Chesgard and friends. None of the mobs were grey to me though, maybe that was what caused the problem for you?
I'm having the same problem. Zoned in, clicked a coffin, killed the zombies, closed the lids... ran around again and again closing lids, nothing clickable, no Lord Chesgard. The zombies were green to me but not easy kills. I zoned out a couple of times to restart the event, but always had the same results. Killed the zombies, ran around closing lids, but no Lord Chesgard.